reactionwheel.net

This also happens, though less frequently, with tech patents: tech patent are usually easier to work around, and the predictability of the value of a tech breakthrough is usually higher at an earlier stage than a drug patent, so the cost/benefit analysis companies make around copying the innovation in defiance of patent law is usually different. If changing from one product to another also requires changing other things—other products, routines, skills, etc.—the total cost of the change may outweigh the benefits so the product already embedded in the system can maintain an advantage over similar entrant products that are not (or not yet) interconnected. Customers may decide to stick with a product in the face of a better product because it is expensive to switch (having learned how to use a complex software package, a user may not want to invest the time and energy in learning a new one, even if it is better) or because it is expensive to learn that a new product is better (the customer may trust a producer or its brand and learning whether a new producer or brand is trustworthy may take either risky trialing or time-consuming research.) Startups can avoid the competition of better resourced incumbents for some period of time by using system rigidity against them through disruptive innovation or value chain innovation.

I was responding to a pitch this week. Stellar team, big market, demonstrated customer need

My short post a few weeks ago on one of Schumpeter’s ideas lightly suggested you could derive most of modern business strategy from that one idea. I suppose this might technically be true if you are a genius with a lot of extra time, but why reinvent the wheel? Last week I taught my class at Columbia’s engineering school about industry analysis

The textbooks for the class will be: Fitzpatrick, Rob, The mom test: how to talk to customers & learn if your business is a good idea when everyone is lying to you, CreateSpace Independent Publishing Platform; 1st edition (September 10, 2013). The final grade for the course will be a weighted average of your grades on the group project papers, an individual paper, in-class participation, and homework. The group will choose an idea for a startup business and will use the strategies and processes we learn to explicate this business opportunity. For clarity and conciseness, I prefer a writing style that is heavier on bullet points, charts and other graphical demonstrations, and analytical argument, not the first-person essay-style writing generally taught in high-school.